The Political Economy of Football V2

Before relegation while under the ownership of Mel Morris, Derby County’s story was one of straining against financial fair play rules as they chased the dream of promotion to the Premier League. They came close with play-off final defeats in 2014 and 2019, but spending big eventually catches up with a club. A spiralling series of points deductions, failed takeovers and financial woes left Derby battling for their Championship status in 2021-22 before they eventually succumbed to relegation. Their very existence was of greater worry, too. Property developer Clowes was the saviour — stepping up to save the club when it looked like all hope had been lost in the summer of 2022. After starting last season with five senior players, no kit and minimal staff before Paul Warne’s arrival in September 2022, Derby finished seventh and missed the play-offs by a place. The Derby built in Clowes’ image and with Warne’s leadership is more modest and humble than the one that came before, as might

The departures of Lionel Messi and Neymar last summer highlighted a dramatic change in Paris Saint-Germain’s strategy, as they appear to be moving away from the “Galacticos” model, replacing their expensive superstars with younger, hungrier players. Indeed, the last of PSG’s incredible front three, French captain Kylian Mbappé, is lined up to join Real Madrid when his contract expires this summer, which would pretty much mark the end of an era. Despite the upheaval, PSG could end up winning the treble this season under Luis Enrique. They are on the verge of winning the league title, which would be the tenth time in the last 12 years, while they have reached the final of the Coupe de France and the semi-finals of the Champions League. Success in Europe’s leading competition would be the icing on the cake for the club’s owners, Qatar Sports Investments (QSI), a subsidiary of Qatar's sovereign wealth fund Qatar Investment Authority (QIA). They acquired PSG in 2011, instantly m

Staging domestic league matches overseas would be another clear sign of the march of globalisation in football as it falls back in other sectors. La Liga president Javier Tebas hopes the top Spanish soccer league can stage a regular-season fixture in the US as soon as the 2025-26 season with global governing body FIFA reportedly set to change its rules on overseas games. Earlier this month, FIFA settled an antitrust lawsuit with sports promoter Relevent Sports, which had accused it of illegally banning foreign teams and leagues from playing official matches in the US. The settlement came more than a year after the federal appeals court in Manhattan, New York, revived Relevent's case, which a trial judge had originally dismissed in 2021. The US Soccer Federation remains a defendant. A Relevent statement claimed FIFA is set to consider changes to its rules about whether games can be played outside a league's home territory, with teams regularly playing friendly matches in

There was a discussion on Radio 4 this morning of the risks of Everton FC going into administration involving a minority shareholder whose name I did not catch. It does seem to me that this is a worst case scenario and if it did happen someone would come into purchase the club as a distressed asset at a knockdown price, even given the cost of completing Bramley Dock.    There would, of course, be an automatic 10 point deduction penalty. Bloomberg reported a few days ago that main financial adviser, Deloitte LLP, is scrambling to find new backers to save a takeover of the struggling club by US investment firm 777 Partners amid fears that the deal could collapse, according to people familiar with the matter. Deloitte has been seeking fresh funding from sports-focused investors and lenders to get 777’s deal over the line, the people said, asking not to be identified because the information is private. The current preference is to attract a partner for 777 instead of getting an ent

Warm congratulations to Leicester City on their promotion to the Premier League.   In 1965/8 I was at university in Leicester and many of my tutors, including my personal tutor Bob Borthwick, were Foxes fans. It has been a rough ride for Leicester with the EFL seemingly determined to make an example of them.    Football finances are increasingly convoluted and if I was qualifying as a lawyer today, I would think that football finance was a lucrative area to practice in.   The lawyers collect their fees and the fans suffer.. Leicester’s usual business model was based on them being a Premier League club challenging for European qualification every season. Relegation hadn’t been factored in. There was no safety net, and they had just come crashing down to earth. The reality of dropping down to the EFL after nine seasons in the top flight was they had to sell players and dramatically cut the wage bill. Ten first-team players left, seven of them as free agents as their contracts had b

Football fans tend to be conservative in their outlook and moving stadium is always a risk.  Indeed, it is in financial terms, not just sentimental ones.  The London Stadium has been a great deal for West Ham financially, but arguably it lacks the atmosphere of Upton Park.   Newcastle fans would prefer to stay at St. James’s Park in the city centre: a poll shows that only 19 per cent want to move despite capacity constraints. At a time when the historic appeal of English football combines with the global popularity of the Premier League, when clubs are sports and non-sports businesses and commercialism chimes with heritage and architecture to form a must-see destination, the Tottenham Hotspur Stadium is the model. It is known for its scale, modernity and clear sightlines that have changed how many see football stadiums. It is, to use a phrase, ground-breaking. Arsenal moved from Highbury in 2006, seven years after the decision to leave was made. One of the main reasons was the club

Should a majority of Premier League clubs vote through the proposed hard spending cap for the 2025-26 season, it would not only aid the competitive nature of what is the world’s strongest domestic league, but also enforce a subtle shift in the perceived power base of English football. The cap idea is based on the concept of “anchoring”, designed to limit the amount of money any club can invest in their squad by tying it to a multiple (probably five) of what the division’s lowest earners get from the league’s centralised broadcast and commercial deals. The Premier League’s broadcast revenue sharing has always been, by European football standards anyway, a relatively noble meritocratic arrangement. It is less that sharing ratio which clubs such as Everton, West Ham and Palace are worried about — and more the consistent advantage clubs such as City, Chelsea and Manchester United have accrued from decades of participation in European football. Not only do the ‘Big Six’ tend to pock

2022/23 is the second full season at Burnley under the ownership of Alan Pace, who has presided over a rollercoaster period, including one relegation and one promotion, since taking over Burnley in December 2020, when his company purchase an 84% majority shareholding. This represented a dramatic change in approach for Burnley, as the new owners put in very little of their own money, instead making the acquisition via a leveraged buy-out, placing debt on the club for the first time in years and using the club’s own cash reserves. Burnley’s auditors (and indeed the club itself) have noted a “material uncertainty” around the the ability to continue as a going concern if they were not able to achieve the forecast player sales and cost reductions in the event of relegation. Some might greet this as a classic case of “No shit, Sherlock”, but it’s clearly not ideal to see such a comment included in the accounts, as it’s relatively rare for an auditor to sound such a note of caution. F

The problem with the award of penalties is that a lot of them are marginal decisions, even with VAR.   This is particularly the case with the handball rule which has arguably been applied a little less stringently as the season has gone on, and probably rightly so. Analysis by the Match of the Day team last night suggested that two of Forest’s penalty claims at Everton were not justified, but the third one was.    The referee should have been at least summoned to the screen to review his decision. It is easy to be critical of Nottingham Forest. And the manner in which they used social media to voice allegations over the integrity of match officials after Sunday’s 2-0 away loss against fellow relegation candidates Everton was arguably undermining the foundations of the game.    Officials make mistakes, sometimes bad ones, but they may not qualify as clear and obvious errors and they indicate poor decision-making rather than bias. Yet while they have been criticised for the way the

The game at Boro tonight will help decide the chances of Leeds United returning to the top flight which is surely where a team located in a regional capital of the UK’s third lar gest metropolitan area  deserves to be.  However, they have also lost money in all three of their seasons in the Premier League, adding up to £82m, so promotion to the top flight is not always as beneficial as people might expect. There is a significant revenue increase, but costs also have to grow in order to compete at the higher level. However, there was an adverse Covid impact and   Leeds’ £82m net loss during their three seasons in the Premier League was one of the better performances, as they were only outperformed by seven clubs. 2022/23 was the last year of Andrea Radrizzani’s time as Leeds’ majority shareholder after he bought the club in 2017, as he sold his 56% stake in September 2023 to the consortium led by 49ers Enterprises, who already held 44%. The investment arm of NFL franchise San Fran

Oxford United's planning application for new stadium is being held up by a series of issues, essentially local politics.  Traffic objections have been raised, but travelling in and around Oxford by car is a nightmare anyway.   Ever been on the A34?  A more general lack of empathy with football also seems to be in play. What it all seems to add up to is delay, but not a final block: https://www.oxfordmail.co.uk/news/24265748.finance-chief-objects-oxford-united-football-club-stadium/

The rapid rise from the fifth to the third tier of the English league system is only part of the Hollywood A list owners’ impact in Wrexham, as an expected balance sheet of £20million-plus for the current season will show when the club’s 2023-24 accounts are published some time next spring. They’ve also infused the town with a hope and sense of pride that had been eroded following the closure of traditional local industries such as the coal mines and steelworks. What nobody truly knows, though, is just how far up the football pyramid their Hollywood-star owners can take a club whose highest-ever league finish in their 159-year history is a relatively modest 15th in the second tier in 1978-79. The ambition is there.   Reynolds made that much clear before a televised FA Cup fourth-round tie against Sheffield United in January 2023. “In 10 years’ time, the plan has and always will be the Premier League,” said the 47-year-old Canadian, who plays the title character in the Deadpool comi

This week Nottingham Forest became the latest Premier League club to announce significant price rises for the 2024-25 season. Forest fans say the rises are likely to price many fans out, particularly teenagers and young adults as the worst rises hit those age brackets. New restrictions on the club’s youth tickets are coming – which will now be limited to 17-year-olds down from 19. Meaning an 18-year-old sat in certain sections of the ground could be going from a ticket that is under £190 to £850. Nottingham Forest Supporters' Trust said the rises were "totally disproportionate" and will likely price people out. Additionally, the club’s flag group, Forza Garibaldi, also condemned the price rises and will be withdrawing upcoming displays at the City Ground in protest. “We are dismayed and frustrated to see the significant rise in season card prices,” they said. Clubs have been hit by inflation, notably utilities which show up in 'other expenses', but any increas

The decision to scrap replays in the FA Cup has attracted widespread criticism, not least from fans, and it is difficult to see why it is necessary in the first or second rounds.   However, revenue and morale boosts for lower league clubs are not systematic and depend, literally, on the luck of the draw. When I was growing up winning the FA Cup was in some ways a bigger deal than winning the league, but that is no longer the case and sentiment clashes with the reality of modern football business.  Some fans hope that a regulator will be able to intervene in decisions like these in the future. Nigel Clough appreciates more than most how integral they can be.   In the winter of the 2005-06 season, he was seven-and-a-half years into a decade as manager of Burton Albion when the then non-League club landed a third-round tie at home to Manchester United. That game finished goalless, earning Burton — who had moved into their new Pirelli Stadium a year earlier — a replay at Old Trafford w

Congratulations to Portsmouth on their promotion to the Championship and the fan base that stood by them.   Fratton Park is a great atmospheric old style ground. Portsmouth is unique in its status as England’s only island city, largely based on Portsea Island, which is connected to the mainland by a handful of road and rail bridges. It provides the setting for a unique mentality among football fans, with its British Navy base and links to the maritime industry core to the identity of many of the city’s 200,000-plus residents. Theirs is a club who have seen the highs of Premier League and European football and an FA Cup final win in the past 20 years   as well as a drastic slide that saw three relegations in four years from 2010, plummeting from the top to the bottom tiers of the English football pyramid. Alongside it, years of financial troubles resulting in two spells in administration saw the supporters take ownership of their club in 2012 before selling to the Eisners five years

Brighton’s pre-tax profit surged from £24m to a very impressive £133m in 2022/23.  Revenue increased by £30m (17%) from £174m to £204m, which was the club’s highest ever, while profit from player sales just about doubled from £62m to £121m.  At the same time, Brighton managed to keep their costs under control, as operating expenses only rose £4m (2%) to £220m, while they had £2.5m net interest receivable. Brighton’s £133m pre-tax profit was easily the best in last season’s Premier League, ahead of Manchester City £80m and Bournemouth £44m, though the latter was boosted by a £71m owner loan write-off. In fact, Brighton’s £133m pre-tax profit is the second highest ever recorded in England, only surpassed by Tottenham’s £139m in 2017/18 (driven by Gareth Bale’s sale to Real Madrid). Only three English clubs have ever managed to post profits above £100m. Brighton have generated the highest profit in the top flight over the last four seasons with a net £37m. Only two other clubs were

It wouldn’t be unfair to say that Rotherham has had its economic and social challenges since the decline of the steel industry.   It is very much in the shadow of a more vibrant Sheffield. ‘Rotherham has been ranked the unhappiest place to live in England according to a survey. Rightmove asked 21,000 people to complete a study based on their overall happiness with their area and what makes a place feel like home. Out of 221 cities, towns and villages surveyed, Rotherham came bottom of the list.’ Many years back after seeing Charlton play an early kick off at Huddersfield, some of us went over to see Brighton play at Millmoor, Rotherham United’s then ground.    I thought it was a typical old style Third Division North ground, atmospheric but not 21 st century. Now the Millers have a smart new stadium, the New York Stadium (actually named after a local area), but they keep yo yoing between the Championship and League One, although the training ground is a swamp and apparently freque

In May 2022 a consortium led by American businessman Todd Boehly and Clearlake Capital acquired Chelsea for £2.5 bln (plus £1.75 bln infrastructure commitment), following Roman Abramovich’s decision to sell the club as a result of Russia’s invasion of Ukraine.  Accordingly, 2022/23 was the first full season completed under the new ownership. Chelsea have now lost money in four of the last five years, adding up to a hefty £434m, including three losses over £100m in this period. The good news is that losses have reduced two years in a row, albeit from a chunky £156m in 2020/21. Chelsea are no strangers to posting large losses, being responsible for two of the four highest losses ever reported in the Premier League (and five of the top 20). Last season’s £90m deficit just sneaks into this list.   they have lost nearly £900m from day-to-day business in the last five years, which takes some doing. Chelsea’s pre-tax loss reduced from £121m to £90m, mainly thanks to £107m once-off accou

Millwall have submitted their 2022/23 accounts reports Kieran Maguire.   Revenue was £19.3m up 4%. Wages £22.6m up 1%.  Losses pre player sales £13.7m up 18%. Player sales £2.7m.  Player purchases £4m. Almost all clubs make substantial losses in this highly competitive division, many much more than Millwall.

Crystal Palace 2022/23 revenue was £180m up 12%, reports Kieran Maguire. Wages (staff and players) were £130m up 5%. Player purchases £56m. Player sales £0.3m Revenue up mainly due to higher income of £15m as higher international deals in Premer League and as the end of the Covid rebate to broadcasters kicks in. Steve Parish pay was up £457k to £2.157m.   Worth every penny?   Some fans might have their doubts to put it mildly. Player purchases £56million. Players who originally cost the club £52m were sold/left the club for £300k. Progress towards becoming more sustainable moved forward significantly over the past year, with senior players departing at the end of their contracts and an overhaul of the squad age. That bears out in their latest set of financial results, which show a pre-tax loss of £24.2 million ($30m) for the 12 months to June 30, 2022, down by £16 million from a year earlier (£40.3m). This latest set of accounts shows Palace’s strategy, although in its earl

Chelsea face a battle to comply with the Premier League’s profit and sustainability rules (PSR) and could be forced to sell players before June 30 after their financial state was laid bare in a sobering set of accounts. The club’s accounts for the year ending June 30, 2023 saw them post a pre-tax loss of £90.1million ($112m), while wages climbed from £340.2m (2022) to £404m in 2023. Chelsea’s accounts also show that between July 1, 2022 and June 30, 2023, they spent a total of £745.2m on new players. Their accounts note that a further £454.1m has been spent on players since June 30, 2023. They raised £203m from player sales and made a net profit of £62.9m on player trading overall. Football finance guru Kieran Maguire commented: “My concern is more for the three-year reporting period ending in this season because they have not had the benefits of European football. We had all been told that the wage bill will go down under Clearlake Capital, but the fact it shot up has taken me b

A grim financial picture at Charlton is revealed by the club's latest accounts as analysed by football finance guru Kieran Maguire.   I will review them myself given a few days. Charlton have now submitted their 22/23 accounts.    Revenue at £9.8m no change.      Wages £10.3m up 8%.       Operating loss for year was £9.9m up 2%.    Player purchases £113k.      Player sales £565k. Club was sold after end of season Charlton are losing about £190k a week as no money left after paying wages for the day to day costs of the club. Charlton total losses from all the seasons it has been in existence now exceed £57 million. No cash at end of 22/23 in the bank.    Charlton borrowed £8.5m in 22/23 to provide working capital to pay the bills. Over half of Charlton’s income comes from ticket sales. Payoffs (to manager?) were £148k in the year. Charlton paying £678k rent in 22/23 (to Roland). Wage bill down but still £105 for every £100 of income. Charlton squad by end of season cost £2.4m. Playe